FSC Announces Guidelines on Fintech Investment by Financial Companies
The Financial Services Commission of Korea (FSC) announced the guidelines on fintech investment by financial companies. The guidelines expand the scope of fintech business in which financial companies are allowed to invest by adopting a negative list approach and take into account the recent trends in technology and regulatory environment. The guidelines are to be implemented from October 2019 on a temporary basis for two years, on the condition that relevant regulatory changes will be made in the meantime.
As per the guidelines, the scope of the fintech investment includes the following:
- Innovative technology businesses in the areas of artificial intelligence, Internet of things, data business, and ICT business
- Innovative financial service provider accepted into the FSC regulatory sandbox or designated fintech firms to operate business commissioned by financial firms
- Fintech businesses recognized by FSC for the innovative digital technology and contribution to the financial sector and consumers, as part of the Negative List Approach
To expedite regulatory approval process, the guidelines require financial regulators to reply within 30 days whether such investment is approved or not. Currently, ancillary business that financial firms are allowed to operate is limited to one directly related to their primary business. The guidelines make it clear for financial companies to operate fintech business as ancillary business once they are allowed to invest in such fintech business. If financial firms make loss in fintech investment, they will be granted mitigation or immunity from penalty, unless such loss was incurred intentionally or out of gross negligence.
Related Link: Press Release (PDF)
Effective Date: October 2019 (for 2 years)
Keywords: Asia Pacific, Korea, Banking, Insurance, Securities, Fintech, Guideline, Artificial Intelligence, Big Data, FSC
Previous Article
BoE Publishes Joint Report on Approach to Cryptoassets and DLTNext Article
EBA Updates List of Correlated CurrenciesRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
